SPX is focusing on Fed minutes and retail earnings this week

On Friday, the S&P 500 Index (SPX) touched $7,785.76, falling just short of its all-time high at $7,816.70. What triggered the pullback? A surprisingly weak retail sales report for July. The figure dropped 0.6%, marking the first decline in nine months and casting a long shadow over the resilience of consumer spending.

On the inflation front, however, the news was more reassuring. The July Producer Price Index (PPI) came in flat, while consumer costs rose a modest 0.1% from the previous month. These readings have driven the probability of Federal Reserve (Fed) monetary tightening in September to around 33%, down from nearly 44% just a week earlier. But here's the catch: much of this positive data has already been baked into the cake, leaving little room for another upside on interest rate expectations. In other words, the market may have front‑run the central bank's dovish shift.

This week promises no shortage of new catalysts. The American regulator's meeting minutes will be released on Wednesday, and retail heavyweights are about to unveil their quarterly scorecards. These numbers will offer a crucial reality check on consumer demand—and could either confirm or dispel growing recession fears. So, traders are bracing for a potentially turbulent few days. 

From a technical standpoint, SPX is hovering near record levels at $7,787.50, maintaining its bullish short‑term posture following a powerful rally from the July 31 low of $7,289.00 to the $7,814.90 peak. The Relative Strength Index (RSI) is now sitting at 73, a threshold that confirms buyer dominance but also flashes a warning sign of overbought conditions, increasing the odds of a corrective pullback. This suggests that, although the trend is still up, momentum may be waning. Meanwhile, the Chaikin Oscillator has turned negative and continues to descend, even as the price stays near its highs. Such a bearish divergence shows that money flows are weakening and buyer enthusiasm may be waning beneath the surface.

For those ready to make a move, pay attention to the trading plan down below:

Sell SPX from current levels of $7,785–$7,790. Place Take Profit at $7,680. Set Stop Loss at $7,870.

This forecast holds true from August 17 till August 24, 2026.